Advocacy Session on “Public Procurement and Bid Rigging”

Bidding or also widely called tendering, is an important process in public procurement which aims to ensure good value for money, efficient use of government resources and prudent government spending. Unfortunately, we cannot assume that competition process comes naturally. The OECD and many studies have reported that bid rigging can increase the costs of goods and services up to 20% or more. In developing countries, the added cost could be 35% to 55% higher. This was highlighted by Yang Mulia Dr Dayang Hajah May Fa’ezah binti Haji Ahmad Ariffin, Permanent Secretary (Economy), Ministry of Finance and Economy in an Advocacy Session on “Public Procurement and Bid Rigging”, attended by Chairman and members of the Competition Commission of Brunei Darussalam, members and secretariat of the State Tender Board as well as Mini Tender Boards from various Ministries, counsels from the Attorney General Chamber and senior officials from the Department of Economic planning and Development.

In her opening remarks, Yang Mulia Permanent Secretary shared that Brunei Darussalam’s economy is still largely dependent on government driven projects. In 2017, the estimate of public procurement activity is valued at around 19 per cent of the GDP. This is a significant proportion, which deserves attention as it has implications on not only to a well­functioning government which can efficiently use resources, but also the efficiency of the sectors involved in the supply chain from inputs, to outcomes. All these activities have implications to a well­functioning economy. It is therefore important to be aware, learn to detect and prevent rigging in a tender or collusive bidding, which may result in inflated prices as well as goods and services with lower quality. When bid­rigging impacts public procurement, it may cause great harm to the government expenditure.

Yang Mulia Permanent Secretary cited few cases in the OECD countries which have proved that improvement of procurement procedures has led to significant savings in a number of countries. Hence, it is important to learn and be aware of bid­rigging conducts to counteract its risk to safeguard our government expenditure.

This is in fact a mandate entrusted by His Majesty in the 11th Legislative Council Meeting Titah, which has time and again underscored the need for the public service to practice prudent spending and focus on cost­effectiveness. Not having an effective procurement process to prevent collusive activities in the tendering process, specifically bid rigging, is no longer an option, with the introduction of Competition Order 2015. This is one of the priorities in preparing towards the enforcement of the prohibition of the Competition Order, 2015. While detecting bid rigging is not easy, what we can do is to learn how to detect and also undertake preventive measures and improve efficiency in the public procurement process.

The session was delivered by competition expert, Dr. Hassan Qaqaya, former head of the Competition and Consumer Policies Branch at the United Nations Conference in Trade and Development (UNCTAD) and Senior Fellow at the University of Melbourne. With decades of experiences in competition and consumer protection field, Dr. Hassan recommended transparency to enhance efficiency in the public procurement process and the need for capacity building and training for government officials involved in the procurement of goods and services to ensure that the government continues to procure quality goods and services with good value for money and maintain prudent spending. Dr Hassan also suggested to explore the use of e­procurement and other technologies to prevent collusive tender.

The session was organised by the Department of Economic Planning and Development, Ministry of Finance and Economy through the Department of Competition and Consumer Affairs on Thursday, 1st November 2018 at the Ministry of Finance and Economy Theatre Hall.